The Budget 2024-25 provided for many provisions for MSMEs and skilling for the apparel and textile industry. Overall the response was positive from the apparel and textile industry but industry insiders still think more could have been done.
Dr. A. Sakthivel, Chairman, AMHSSC commends the Budget, prioritising employment and skilling, social justice, and manufacturing, as well as the particular consideration given to promoting employment and skilling. One of the standout initiatives is the scheme to provide one crore youth with internship opportunities in 500 top companies. Furthermore, the Government’s employment-linked incentives initiative aims to promote job creation within the manufacturing sector.
Dr. S.K. Sundararaman, Chairman of SIMA has welcomed several provisions from the Budget which include:
The importance given to skilling and employment along with the announcement of Credit Guarantee Scheme for MSMEs.
The mechanism for facilitating the continuation of bank credit to MSMEs during their stressed period.
The announcement of reducing the BCD on Methylene diphenyl diisocyanate (MDI) used for the manufacture of spandex yarn from 7.5 per cent to 5 per cent.
The allocations granted by the Finance Ministry for exports i.e., RoDTEP and RoSCTL with an increase of 5.8 per cent and 10 per cent for the year 2024-24.
The Employment Linked Incentive Scheme that would reimburse EPFO contributions of employers upto Rs. 3000 per month for two years for the new recruits and the announcement of one month wage to new entrants in all formal sectors in three installments upto Rs.15,000/-.
Along with these, he also welcomed the strengthening of infrastructure and agriculture as well as the announcements of industrial parks, rental housing for workers, increase in MUDRA loan limits and regular allocations made for textile industry towards TUF Scheme, skill development, PLI, NTTM and PM-MITRA Parks.
Commenting on the Union Budget 2024-25 Sudhir Sekhri, Chairman AEPC said, “The garment industry hails the acceptance of the demand of AEPC by expanding the list of trims and embellishment under IGCR, which will help the RMG industry thrust exports.”
“The enhancement of limit under credit guarantee scheme for MSMEs in manufacturing sector, grant of one month wage to new entrants in all formal sectors up to Rs 15,000, EPFO contributions for new manufacturing employees for four years, incentives for setting up of women hostels, dormitories and crèches and upgrading the industrial training institutes will help the garment industry scale up and be future ready.”
Rahul Mehta, Chief Mentor, CMAI said, “The steps to include an internship scheme, the decision to reimburse one month’s wages for new employees, and subsidies for employees earning over Rs. 1 lakh are excellent steps being taken. However, there are many open-ended areas at this point, and we await the details before making specific suggestions. Whilst most of these measures are for all industries, they will likely benefit the textile and apparel industry equally, if not more, since it is more labour-oriented.”
Kumar Rajagopalan, CEO, RAI, said, “Initiatives such as monetary support for farmers, higher exemption limits in personal income tax, and increased standard deductions will provide higher disposable income, leading to increased spending.”
“The Government’s commitment to skilling and employment support, including initiatives for youth employment and skilling programs, is another commendable aspect of the budget,” he added.
“The budget’s emphasis on MSMEs and startups, including enabling more lending and abolishing angel tax, is a positive step. Tax simplification and compliance, which are crucial needs of the hour, have also been addressed. Additionally, the Employment Linked Incentive, offering reimbursement to employers up to ₹3,000 per month for two years towards their EPFO contribution for each additional employee, is a welcome move.”
Rakesh Mehra, Chairman of CITI, said, “The credit assurance schemes will provide the much-needed impetus to the growth of large number of textile and garment MSMEs and enable them to expand their operations and innovate,”said Mehra.
The increased focus of Government towards skilling and the announcement of the Employment Linked Incentive scheme coupled with the decision of easing the FDI norms will facilitate new investments in the textile industry. Moreover, the financial support for clean energy transition, energy initiatives, and energy audits underscores the Government’s commitment to sustainable development.
However, he said, “With the exception of enhanced PLI scheme allocation to Rs 45 crore from earlier Rs 5 crore, there is no major announcement to address the industry’s loosing competitiveness”, he observed. “The PLI scheme has not been able to address the investment needs of the large majority. Revival of capital subsidy schemes will be needed to ensure large-scale investments,” he added.
